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Clinton to Return Money Linked to Fund-Raiser

Senator Hillary Rodham Clinton’s presidential campaign announced last night that it would return about $850,000 to about 260 donors who had been recruited or tapped by Norman Hsu, the disgraced Clinton campaign fund-raiser who recently fled arrest and is now under investigation for his fund-raising practices.

The Clinton campaign also disclosed last night that it would begin running criminal background checks on its bundlers — the dozens of individuals who raise hundreds of thousands of dollars from donors on behalf of a candidate, as Mr. Hsu had done for Mrs. Clinton. A Clinton adviser said that “vigorous additional vetting” of the bundlers, including the criminal checks, would begin this week, and that the campaign was hiring people for that purpose.

Mr. Hsu’s legal problems have created the Clinton campaign’s first major in-house controversy. While Mr. Hsu donated $600,000 to an array of candidates over the last three years, he had become primarily a Clinton fund-raiser for this presidential cycle — one of the so-called Hillraisers who held events for Mrs. Clinton and aided her in the money race with a leading Democratic rival, Senator Barack Obama of Illinois.

The Clinton adviser, who spoke on condition of anonymity to discuss internal campaign deliberations, said Mrs. Clinton, of New York, “did not want the Hsu issue to be a distraction for the campaign, and wants to make sure this doesn’t happen again.”

“We wanted to get a few days ahead of any problems that come out, rather than be a few days behind them,” the adviser said.

The adviser declined to comment on whether the Clinton campaign had determined that Mr. Hsu violated federal election law by recruiting people to donate to the Clinton campaign and then paying those people to cover their donations. Some generous donations associated with Mr. Hsu have been revealed to be from people who appear to be from fairly modest backgrounds.

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Norman Hsu, a top Clinton fund-raiser, is under investigation for his practices.Credit
Paul Sakuma/Associated Press

The New York Times reported on Sunday that a company controlled by Mr. Hsu had paid a total of more than $100,000 to at least nine people who made campaign contributions to Mrs. Clinton and others through Mr. Hsu.

The Federal Bureau of Investigation has begun an inquiry into whether Mr. Hsu paid people to give money to Mrs. Clinton and other candidates, The Los Angeles Times reported yesterday, quoting anonymous sources. At least some of those donors may have been investors in a business venture Mr. Hsu was running.

At the end of June, Mrs. Clinton had about $45 million on hand for her presidential campaign; $850,000 is less than 2 percent of that sum, but, her advisers say, it is a sizable amount that would have been welcome for advertising purchases ahead.

A spokesman for former Senator John Edwards’s presidential campaign said that it began doing criminal background checks on bundlers after Mr. Hsu’s troubles came to light.

An Obama spokesman said the campaign did its “absolute best” to vet all donors, but would not specifically say whether criminal checks were done for bundlers.

Since last week, Mr. Hsu has been hospitalized in Colorado, where he surfaced after failing to show up for a California court hearing days before. Mr. Hsu had been wanted in California since 1992, when he missed another court date and apparently fled to his native Hong Kong, instead of facing up to three years in prison for a fraud conviction.

The Clinton campaign made its announcement around 6:40 p.m., shortly after the network news programs had begun on the East Coast. The timing was roughly the same Aug. 29, when Clinton advisers disclosed that they were giving Mr. Hsu’s $23,000 in personal donations to charity. Clinton aides, who have been trying to contain the damage from the case, have been monitoring the number of stories the evening news programs have run on Mr. Hsu — only a handful thus far.

A version of this article appears in print on , on page A22 of the New York edition with the headline: Clinton to Return $850,000 Linked to Fugitive Fund-Raiser. Order Reprints|Today's Paper|Subscribe